CARACAS Jan 8 Venezuela's central bank said on
Wednesday that a new $90 million currency auction will include
companies in the food and packaging industries as the government
seeks to get more dollars to importers.
Under Venezuela's foreign exchange system known as Sicad,
the bank holds weekly auctions to sell dollars at around 12
bolivars, compared with the official rate of 6.3 bolivars.
In December, the administration of President Nicolas Maduro
said it was expanding the use of Sicad, meaning fewer
transactions would be carried out at the 6.3 rate, in what
economists largely viewed as a partial or disguised devaluation.
Word of the auction raised eyebrows because it will target
importers of products such as corn and wheat flour, corn oil,
rice and pasta, the central bank said. Importers of those basic
items had been receiving dollars from the government's Cadivi
currency board, which sells greenbacks at 6.3 bolivars.
But dollars fetch more than 10 times that on the black
market as delays and restricted access to Cadivi sales leave
businesses struggling to pay offshore providers.
The Sicad auction will also be open to businesses in the
paper, cardboard and wood sectors - important in the Venezuelan
food chain. Pharmaceutical firms and automakers are also
included. The results are due on Jan. 14.
A devaluation of the bolivar has long been predicted for
early 2014, but analysts say the government is already
effectively moving in that direction by shifting more products
to Sicad instead of Cadivi.
"This piecemeal approach to a forex devaluation is likely
intended to diffuse the political backlash with a gradual
transition," said Jefferies investment bank Latin America expert
Maduro, who narrowly won a presidential election in April to
replace his late mentor, Hugo Chavez, believes inflation and
shortages of consumer products are caused by political rivals
backed by U.S.-based foes who want to undermine him.
Critics say high inflation is due to economic mismanagement
and the failure of government policies, including a decade of
strict currency controls that were set up by Chavez.
Last month, the government said annual inflation hit 56.2
percent in 2013, but that the monthly rate slowed in November
and December after Maduro began an "economic offensive"
involving a campaign of forced price cuts.
The economy grew by an estimated 1.6 percent last year,
compared with 5.6 percent recorded in 2012.